Thinks 620

Eric Ashman: “Every sales channel impacts your startup’s margin profile and cash flow in different ways. You need to consider the impact on your cost of sales, return rates, sales & marketing, and even the required expertise of your employees. Cash flow considerations can vary widely, and access to future funding or debt financing for inventory and capital investments can open or close some potential paths.”

Alex Zekoff: “The gold standard is a burn multiple of one — for every dollar you burn, you add a net new dollar in subscription revenue. At less than zero, you are in a cash-flow-positive position, which is really hard to do. But say that you are burning $2 million in a quarter, and you are only adding $500,000 of net new ARR. You are at a 4x burn multiple, and you probably need to start thinking about how to reduce that.”

Lewis Kallow on the ultramarathon mindset: “Your brain is hardwired to avoid pain and seek pleasure. This single drive is so powerful that it’s sculpted every aspect of the modern world. From our temperature controlled buildings, to our home delivered food, to our infinite libraries of entertainment beamed down from the sky, we’re now surrounded by miracles designed to make every aspect of our lives comfortable. Courtney, however, has learned to completely flip this instinct on its head. What she craves is discomfort. When things get tough during a race, Courtney enters what she describes as the “pain cave”. She uses visualization to picture herself in a cave with a hardhat and chisel, and as she pushes through the pain of the run, she imagines chiseling tunnels through the rockface. Pain is gradually chipped away into progress as her cave gets bigger and bigger.”

The Muniverse: A Brand New World (Part 3)

Arun and Jeni

In the first two parts of “Constructing the µniverse”, I had introduced Arun and Jeni. Arun is a consumer, and Jeni is a marketing manager. I had written about a day in their future lives. In the rest of this series, I will go deeper into how they both benefit from the Muniverse and how their lives change for the better as the Muniverse evolves from its startup phase to its Web2 and Web3 avatars. Let’s begin by revisiting what I had written to get a glimpse of tomorrow’s world as seen through the eyes of Arun and Jeni.

Arun:

Arun checks his Micronbox for brand messages. 20-odd messages that have come in overnight vie for his attention. There is no spam because every one of the messages is from brands he has opted in to. That is why he switched his brand interactions from Gmail to Micronbox. The Subject lines prefixed with µ tell him what brands are willing to pay for his attention. He opens the email from A1 Books – there are 5 recommendations for him. Micronbox has interactive emails, so he can click on a book and read more right inside the email. A1 Books offers him 5µ for reading more about each of the books. He checks out two of them, earns 10µ and adds one of the books to the shopping cart. He doesn’t need to leave his Micronbox at all.

… An email from the telco wants to know more about him – “zero-party data” as it is called. He answers two questions and is rewarded 30µ by the telco.

Arun then engages in “Word Play”, a Wordle-like game that gets delivered to his inbox daily. He guesses the word on his fourth try and earns 3µ. (A guess on the third attempt would have gotten him an extra µ.)

… Arun’s µCount has reached 4500. He goes to the µExchange and offers 4000 for sale. He sees that the price is a bit higher than it was a month ago when he had done the last trade. The sale is done, and he is happy to see the extra cash in his crypto wallet.

The Micronbox and wallet referred to above are part of the MuApp.

Jeni:

Jeni is the marketing manager at A1 Books. She handles the µProgram as part of her responsibilities. Besides overseeing the email program, she also has responsibility for ensuring an adequate supply of µ for rewarding customers. She uses the µExchange to make periodic purchases of µ, which are in turn then given to customers for their attention and engagement. She has seen a multi-fold increase in transactions after A1 Books joined the µniverse ecosystem.

… Jeni could buy µ from the µExchange and reward her customers for their time, attention and engagement. The price was set by the trades being done – much like the stock market. End customers earned µ and could either use it for vouchers and special discounts in the µShop or sell their earnings on the µExchange. Since the absolute µ in circulation was capped and there was no single centralised entity who could potentially debase the value of µ, it was up to brands and customers to determine the fair value in the marketplace.

… For Jeni, µniverse helped solve the biggest problem she faced – attention recession among her existing customers. She could now use variable rewards to incentivise the actions she wanted. Her customers also were happy that their time was valued. This win-win relationship helped Jeni get more from her existing customers, reduce her new customer acquisition spends, and put A1 Books on the path to sustained profitability.

How did this wonderful, win-win, almost magical, future happen for Arun and Jeni?

Thinks 619

Dan Shipper: “The first big idea in Standing at the Edge by Zen priest Joan Halifax is this: Traits, behaviors, and emotions that we usually consider healthy—like altruism, empathy, engagement, respect, and integrity—can, when pursued to their extreme, tip our psychology over the edge from health into sickness. The second big idea is this: That we grow from falling over the edge. If we carefully observe and explore what Halifax terms the “edge states” of our psychology, we can turn what we learn into our greatest possible moments for growth and wisdom. And…just maybe…we can learn to pull ourselves back from the edge more often. In summary: the good pursued to its limit becomes the bad, and exploring the dark places we visit in our pursuit of the good can create the conditions for growth, change, and wisdom.”

Ajit Ranade: “About 13 million young people join the workforce in India every year. Even assuming only half of them seek jobs, i.e., a workforce participation rate of 50%, we still need 6-7 million new jobs (or livelihoods) every year. These are in addition to the churn among existing job holders, which add to the count of total job seekers. Except for a few thousand, most new jobs are not created by large corporates, public or private. These jobs don’t even come from the railways, post office department, the police or the armed forces. They mostly come from small, medium and tiny one-person enterprises. Thus, 6 million new jobs need at least 60,000 businesses to be born every year. Hence, our clarion call for job creation should be accompanied by a stirring call to create enterprises. What does it take to set up new businesses at such scale? Are these to be born mainly in urban areas? Do the midwives at birth present a formidable hurdle? What is the burden of formal registration, tax compliance and other regulations, including at the local and state levels? Will these enterprises have high infant mortality? Do many more therefore need to take birth? Will an inspector raj thwart ambitions? In any case, most youngsters among the large mass entering the workforce are ill-prepared to become entrepreneurs.”

John List: “When I think about high voltage, if you want an analogy, high voltage, to me, gives you a chance to reach new people in new situations with your idea. And, what I say in the book is, from the very beginning, if we’re about making change in the world, we should understand what are the constraints or regulations or changes that we will be facing when we scale an idea and bring that back to the Petri dish and add that to our A/B test.” He is the author of “The Voltage Effect.”

The Muniverse: A Brand New World (Part 2)

MuCo Future

Here is a glimpse of what the Muniverse looks like (from “The MuCo Future”):

Think of it as a two-sided system. Consumers have time, personal information, their social networks, and their recommendations to offer – attention, data, network and voice. Brands can benefit from all of these. But they have no easy way to compensate customers for these. They could use points as part of their existing loyalty programs, but there are two constraints: rewards for these non-monetary actions need to be much smaller than what is possible via the loyalty programs, and not all businesses have loyalty programs. The way to solve this problem is to create a pan-brand solution delinked from money – that is where Mu as points or tokens comes in. Micro-incentives for small, in-the-flow actions all add up to enable a meaningful aggregate for consumers who can now be offered an array of ‘priceless’ experiences by the brands at close to zero cost.

… Think of MuCo as a Mu factory. It takes fiat currency as input and produces Mu. The Mu can then be distributed by the buyers (brands) to their customers – MuCo has no control over that process. MuCo maintains a centralised database which tracks the flow of Mu (from source to destination). End consumers have to come to MuCo to use the Mu – they begin by activating it by identifying themselves (email address, mobile number) to claim the Mu that has been given to them by brands. Thus, brands and consumers have “wallets” and transactions are stored in a database. This is almost identical to how current loyalty programs work.

Consumers will then want to redeem Mu. For this, MuCo will need to run a market of offerings from brands. This can work in two ways: either MuCo ‘buys’ the products from brands and ‘sells’ it to customers (like a Mu Shop) or brands can themselves sell directly to customers (in a Mu Marketplace). In the latter scenario, brands get Mu in return for their ‘experience’ offerings.

… MuCo is thus running a 2-sided marketplace between brands and consumers. The challenge such marketplaces face is the ‘cold start’ problem – creating enough demand on both sides to get activity going. To overcome this problem, MuCo may need partners who can help accelerate the process of getting Mu in the hands of consumers. It will also need to create an attractive shop to get consumers to see the value and utility of Mu before brands start coming in with their own offerings.

… Making MuCo as a Web3 entity is important for multiple reasons: governance is not in the control of a single ‘centralised’ entity but is decentralised, which in turn should lead to an increase in trust in Mu; Mu creation is decided by rules and is either capped or the increase is pre-planned, which should then lead to appreciating in the value of Mu over time creating an alternative to simply spending it; and the creation of a Mu Exchange, which allows trading of Mu without a central intermediary determining the price.

… In the new world of two-way engagement where customers are digital and can engage in myriad different ways with the brand, Loyalty 2.0 and MuCo provides for a deeper and better relationship – a true, long-lasting ‘friendship’ that transcends money. Web3 elevates MuCo to beyond the control of a single entity; it makes the community central. Brands (with their marketing managers) and customers can come together to create a better relationship without Big Tech as the intermediary. A trust platform based on Web3 principles and the blockchain can serve as the perfect foundation.

… What is exciting about MuCo is that it can solve a real problem (or perhaps two): for brands, attention recession and data poverty; for customers, the soft-touch multi-dimensional engagement with brands beyond just the transaction. And at the intersection is a $200 billion ‘AdWaste’ opportunity. In a world where profits are once again coming centrestage, MuCo is an idea whose time has come!

A key component of the Muniverse will be the MuApp, as I wrote in “MuApp: The Brand-Customer Hotline”: “[T]he MuApp [is] an inbox for brand messages linked to a customer’s email address and mobile number, a wallet to store Mu tokens and XRTs, and an interface to the Mu marketplace and exchange. The MuApp enables the easy flow of Mu between brands and customers, thus enabling the monetisation of attention and data. It integrates Email 2.0 and Loyalty 2.0. It is the hotline that creates a win-win by enabling brands to cut their AdWaste by building better relationships with their existing customers, who can in turn become promoters to assist with better new customer acquisition, providing a Big Tech bypass and an entry point to the µniverse.”

So, what does life in the Muniverse look like?

Thinks 618

Praveen Chakravarty: “Free trade, friend trade, foe trade, forced trade — the narratives and economics of global trade have never been so beguiling and bewitching. The torchbearer of free trade, America, is now sheepishly admitting defeat with its shift to a ‘friend trade’ narrative. On the other hand, a champion of trade barriers and protectionism, Russia, is now willing to get into trade agreements even with its war enemy. It is a fool’s errand to slot nations in the modern world into sharp Left and Right economic ideologies.”

Ezra Klein: “In their new book, “The Paradox of Democracy,” Zac Gershberg and Sean Illing make a simple but radical argument. They write, quote, “It’s better to think of democracy less as a government type and more as an open communicative culture.” Their point there is that democracies can end up in many types of governments. We tend to think of liberal democracies, but that’s only one possibility. You can have illiberal democracies. Democracies can vote themselves into fascism. Democracy doesn’t guarantee you any particular outcome. And so what drives a democracy, what decides what it becomes or what it stays is that open communicative culture, the way its members learn about the world, debate it, and ultimately persuade each other to change it or not change it.”

Rita McGrath: “A complex systems sale begins with the establishment of a high-quality relationship with a customer. Understanding customer issues and building trust are paramount. You would want to know the number and quality of the potential client network members, the nature of the conversations you are having with them and of course whether they have an ability to pay for the kind of high-touch, customizable services you might offer. Customer research is expressed in stories and anecdotes. The sales cycle can be very long – years, in some cases. That doesn’t mean you shouldn’t stay on top of keeping in touch and communicating. With these kinds of sales, you never know when the right intersection of problem / budget / decision will occur.”

The Muniverse: A Brand New World (Part 1)

Marketing Transformations

Four transformations will shape marketing in the coming years:

  • the shift from continuous new customer acquisition to focusing on existing customers (Martech 2.0),
  • the creation of differentiated experiences for Best Customers (Velvet Rope Marketing),
  • the building of hotlines via email for two-way engagement (Email 2.0), and
  • the use of Atomic Rewards to solve the twin problems of attention recession and data poverty (Loyalty 2.0).

Taken together, these trends will lead to better brand-customer relationships and less “AdWaste” to drive “profit-centric marketing” via exponential, forever, profitable growth. Half of marketing spends (about $200 billion annually) are drained by reacquisition of churned or inactive customers, and wrong acquisition. The key to controlling rising CAC (customer acquisition cost) is by deepening the emphasis on existing customers with the 5 Rs: retention, repetition, referrals, reactivation, replenishment. Otherwise, marketers run the risk of constantly pouring money into a leaky bucket which can have a negative impact on profitability and can threaten the brand’s existence against a backdrop of a slowdown in consumer spending.

All of these are themes I have explored in my writings over the past two-and-a-half years on the blog.

Martech 2.0: Focus on Existing Customers

Velvet Rope Marketing: Focus on Best Customers

Email 2.0: Build Hotlines to Customers

Loyalty 2.0: Tokenise Attention and Data

In this series, I will explore the new world that these coming changes will create, centred around the use of Atomic Rewards to tokenise attention and data. Attention is upstream of transactions, and data is the oxygen for personalisation. Tomorrow’s world is about omnichannel personalisation and the Muniverse (what I have also termed as the µniverse) is at its core.

Thinks 617

Francis Fukuyama: “There have been three essential justifications for liberal societies that have been put forward over the centuries. The first is a pragmatic rationale: liberalism is a way of regulating violence and allowing diverse populations to live peacefully with one another.  The second is moral: liberalism protects basic human dignity, and in particular human autonomy—the ability of each individual to make choices. The final justification is economic: liberalism promotes economic growth and all the good things that come from growth, by protecting property rights and the freedom to transact.”

Adrian Wooldridge: “Leaders and would-be leaders can make sure that they carve out time for serious reading or calm reflection: Even when he was running Microsoft Corp. from day-to-day, Bill Gates would retreat to an isolated cottage for a week and meditate on a big subject. Parents can prepare their children for the world by encouraging them to read great literature or, better still, commit some of it to memory. But individual action is unlikely ever to be enough given the size of the forces eroding the store of leadership qualities. We need to do more to protect society from the digital deluge — perhaps following Finland and requiring schools to teach children about fake news. We also need to add a little more old-fashioned conservatism to our educational systems — emphasizing the importance of duty and high culture as well as the claims of meritocracy, on the one hand, and social justice, on the other.”

Ninos Malek: “We often hear how wonderful certain countries are because they provide “free healthcare” or “free education.” Many will also say “I got it for free” because they didn’t pay with money. The error lies in not understanding the difference between price and cost. For example, people usually say, “The Starbucks latte cost me five dollars” or, “The movie ticket cost me fifteen dollars.” Cost in economics means what you give up or sacrifice. In these examples, the prices were $5 and $15. But the cost of the latte was perhaps the sandwich one could have purchased instead with that same $5, and the cost of the movie was perhaps the three lattes one could have purchased instead with that same $15…There’s a difference between zero price and zero cost. There could be a zero price ($0), but there’s never a zero cost. Therefore, don’t swear anymore by using the “F” word!”

MuApp: The Brand-Customer Hotline (Part 7)

Mu Wallet and Exchange

The MuApp will also need support for a wallet and interfacing to an exchange. The wallet section would track the inflow and outflow of Mu tokens. Tokens would be earned not just via actions in the email but also in SMS, push notifications and WhatsApp. Later, the earning could be extended to actions done on the website and in the app. (For example, a brand could incentivise opening an app for three days in a row to create habits. Customers could also earn Mu for referrals and reviews.)

An exchange is where the trading of Mu can take place. MuCo itself could auction Mu on a regular basis, and consumers could sell Mu to each other or brands. As demand rises, there could be an appreciation in the value of Mu. A marketplace may also be needed for brands to sell “priceless experiences” to customers, thus increasing their haul of Mu for rewarding customers.

Here are more details from my earlier essay on “The Mu Future”:

Think of MuCo as a Mu factory. It takes fiat currency as input and produces Mu. The Mu can then be distributed by the buyers (brands) to their customers – MuCo has no control over that process. MuCo maintains a centralised database which tracks the flow of Mu (from source to destination). End consumers have to come to MuCo to use the Mu – they begin by activating it by identifying themselves (email address, mobile number) to claim the Mu that has been given to them by brands. Thus, brands and consumers have “wallets” and transactions are stored in a database. This is almost identical to how current loyalty programs work.

Consumers will then want to redeem Mu. For this, MuCo will need to run a market of offerings from brands. This can work in two ways: either MuCo ‘buys’ the products from brands and ‘sells’ it to customers (like a Mu Shop) or brands can themselves sell directly to customers (in a Mu Marketplace). In the latter scenario, brands get Mu in return for their ‘experience’ offerings.

This is quite straightforward. MuCo derives its revenues selling Mu. With enough Mu out there, brands will find it to their benefit to create offerings for consumers. Mu works across brands – that is its true utility.

MuApp’s wallet can also hold XRTs. As I wrote earlier: “The XRT (eXtreme Retention Token), which opens a gateway to differentiated experiences for the Best Customers … The XRT can be thought of as an NFT which opens a world of privileged experiences for the Best Customers – so they can keep coming back for more and bring their friends, thus maximising their category spend with the brand.”

**

So, that’s the MuApp: an inbox for brand messages linked to a customer’s email address and mobile number, a wallet to store Mu tokens and XRTs, and an interface to the Mu marketplace and exchange. The MuApp enables the easy flow of Mu between brands and customers, thus enabling the monetisation of attention and data. It integrates Email 2.0 and Loyalty 2.0. It is the hotline that creates a win-win by enabling brands to cut their Adwaste by building better relationships with their existing customers, who can in turn become promoters to assist with better new customer acquisition, providing a Big Tech bypass and an entry point to the µniverse.

Thinks 616

FT: “Some memory lapses are actually attention problems, not memory problems. For instance, if you’ve forgotten the name of someone you met at a cocktail party, it could be because you were talking with several people at the time and you didn’t properly pay attention when you heard it. “Inattention is the biggest cause for memory difficulties, ” Dr. Restak said. “It means you didn’t properly encode the memory.” One way to pay attention when you learn new information, like a name, is to visualize the word. Having a picture associated with the word, Restak said, can improve recall. For instance, he recently had to memorize the name of a doctor, Dr. King, (an easy example, he acknowledged). So he pictured a male doctor “in a white coat with a crown on his head and a scepter instead of a stethoscope in his hand.””

NYTimes: “For decades, the fans who powered the comic book industry made weekly pilgrimages to their local comic shops to buy the latest issues about their favorite caped-and-cowled adventurers. These Wednesday Warriors, named for the day new installments typically land on shelves, still do. Voracious readers of printed comics, they skew older — and are mostly male. But now all it takes is a smartphone, as the world of comics is reshaped by the kind of digital disruption that has transformed journalism, music, movies and television. Web comics have exploded in popularity in recent years, in part by tapping into an audience the industry had long overlooked: Gen Z and Millennial women. The stories they offer — of a young woman battling sexism in the world of e-sports or a romance-focused retelling of Greek myth — are mostly free and scroll vertically on smartphones, where readers under 25 live. And they have minted stars from a new generation of creators.”

Read: Upgrade by Blake Crouch. Gene editing sci-fi thriller.

MuApp: The Brand-Customer Hotline (Part 6)

Email Reimagined

By making the MuApp double as an email client, it enables continuity. Most websites use email addresses as their handle, while apps use the mobile number. MuApp should be able to use the IMAP protocol to access existing email boxes on Gmail and Yahoo with a user’s credentials and pick out the “microns” (emails with Mu). This way, there is no change in user behaviour except using a new app for earning and burning Mu. Brand marketing emails don’t need a reply; with AMP, all interactivity could be done inside the email itself. A similar approach could be taken with incoming messages in the SMS inbox. Thus, the MuApp becomes a unified inbox of all brand emails and SMSes. Consumers can continue to use their existing email IDs and mobile numbers on websites and apps, and not have to worry about creating new credentials. (Over time, a MuCo ID or wallet address could become the unifying identity, enabling changes in email addresses and mobile numbers.)

Emails have a lot of scope for innovation. The only change that has happened in the past 10-15 years has been the shift from text to HTML. While AMP can enable the creation of interactive emails, the opportunity for transformation is in the email footer. Most footers just have an “unsubscribe” option. Since it is at the bottom of an email, any changes made to the footer do not interfere with the brand message. What if we could rethink the email footer the way newspapers do comics pages? For many, the comics are the only reason to open the newspaper! But in navigating to the comics pages, they also browse through the rest of the newspaper and the ads.

The email footer can be reconstructed as having three parts: a brand section, a MuCo section, and AMP ads. Each section can have one or more AMPlets. All actions in the AMPlets are done in-place; there are no clickthroughs out from the emails.

Brand footer: This can be used by the brand to engage with customers. Examples of AMPlets: rating (feedback on the brand or email content), chat, cart, search, preference collection, and so on. By combining with pan-brand Atomic Rewards, customers can earn Mu tokens for their actions. A “µ.[MuCount]” in the subject of the email can signal that this is an email with rewards (a micron).

MuCo footer: This can give opportunities to burn Mu. A Mu Shop can provide options for how to use the Mu. AMPlets with content subscriptions for news, stock quotes, weather, health tips, quotes, casual games, puzzles and even comics and cartoons can make the MuCo footer very attractive and a “must-see”.

AMP ads: Most ads we see on websites and apps are banner ads entailing a click. How can these be reimagined if we eliminate the click and instead bring in interactivity and engagement within the ad? Since the identity of the email recipient is unique, ads can be targeted and serve as lead generation vehicles. Additional form-fill data can be captured right in the email itself. Brands would benefit financially from ad actions which could also help defray the Mu costs.

Thus, the plan vanilla email with marketing offers can come alive: interesting, interactive and incentivised; a sort of “Living Email.”